Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2008 makes a number of minor changes to the Pharmaceutical Benefits Scheme, which I will talk about in a moment, but there is something else I want to address. I note that the debate on the previous bill was also about the Pharmaceutical Benefits Scheme, and I want to take this opportunity to talk a little bit about the history of the PBS, because there are some arguments about whether it is 60 years old—and it certainly is 60 years old this year if it was introduced in 1948, as the member for Isaacs talked all about a little bit earlier—or if, in fact, it is a little bit older than that.

I thank the Parliamentary Library for this research, although I might ask them if they would be good enough to update their overview of the PBS. It appears that the PBS has a very rich history. It goes back to 1919, when the Repatriation Pharmaceutical Benefits Scheme was established to provide free pharmaceuticals to ex-service men and women after World War I. That is when the PBS, arguably, had its very first activities and its genesis. There were agreements made between various Australian pharmaceutical societies to provide necessary medications for veterans of both the Boer War and the First World War.

In 1944, the then Curtin government attempted to introduce free pharmaceuticals through the Pharmaceutical Benefits Act. Benefits were to be restricted to medicines listed in the Commonwealth Pharmaceutical Formulary and were only to be granted on the presentation of a prescription written by a doctor on a government form. However, it is interesting to note that the Australian branch of the British Medical Association—I assume that the AMA did not exist at that time—challenged the act and that the High Court subsequently declared that the act was unconstitutional because the Commonwealth did not have the power to spend money on the provision of medicines. Then, in 1947, a new Pharmaceutical Benefits Act was passed, to the credit of the then Chifley government. However, there was ongoing resistance from the medical profession. I have not got the information on why they were so opposed, but I can only speculate that they were concerned about government regulation of an industry that had previously been unregulated. Again the BMA challenged the act, and again the High Court found the 1947 act unconstitutional. There were various challenges around at that time.

However, during 1948 remote health establishments such as bush nursing centres were approved as hospitals under the Pharmaceutical Benefits Act for the purpose of applying pharmaceutical benefits to geographically isolated communities. Basically, over the years there were further pieces of legislation: in 1951 the National Health (Medicines for Pensioners) Regulations under the National Health Service Act 1948-49; and the establishment of the Pharmaceutical Benefits Advisory Committee, the PBAC, which exists today, in 1953 under the Menzies government. Then, really, the Pharmaceutical Benefits Scheme as we know it today was introduced on 1 March 1960. We can all argue about it, but it appears as though at the end of the day there was bipartisan support for the creation of the PBS, and I think that is a good thing given that it is such an integral part of the health system overall. But, of course, it was the Menzies government, on 1 March 1960, that introduced a copayment of five shillings. The irony is that, when they introduced a copayment of five shillings in 1960, the number of prescriptions increased from 24.6 million to 60 million within eight years. So it defies a lot of the common sense of this place that if you apply a fee, you actually have a reduction in usage. The Menzies government applied a fee in relation to the PBS, and usage almost tripled within eight years.

Over the years the PBS has grown significantly in expenditure. In the 1991-92 financial year the expenditure on the PBS was $1.11 billion, by 2001-02 it was $4.18 billion. So in a period of 10 years it has increased fourfold. What is really important is that the Pharmaceutical Benefits Scheme as a whole is recognised, at times grudgingly, by international analysts as one of the best—if not the best—pharmaceutical support schemes in the world. In part that is because it is bipartisan—and there is a lot of merit in that—but it is also because we, as a collective in this place, believe that you have to be prepared to provide support to people that need it. This goes to the heart of why we are members of this chamber and what we believe in as Australians, which is the provision of an appropriate safety net for the whole population but specifically for those people who are most in need of support.

The PBS continues to serve the Australian people very well. Drugs are accessible; drugs are properly tested; and, for Australians, the drugs are affordable. There will always be debates about whether a drug should be listed. Pharmaceutical companies and various interest groups will always mount an argument for a new drug. One of the hardest decisions that the cabinet and the government have to make is whether you do list a drug.

When I was in the cabinet, the most difficult decisions were often about whether you would allocate an extra half a billion dollars to a specific drug that alleviates pain for people suffering chronic illness maybe for two or three years. It gives them an extra 12 months or two years of life expectancy in less pain than they might otherwise have endured. But do you spend that half a billion dollars on research to find a long-term cure or do you spend it on a drug that alleviates pain? Ultimately, that is one of the reasons that big decisions have to be made by the cabinet.

I have great sympathy for members of cabinet, be they Liberal or Labor, who have to make those decisions. I always found them the most difficult ones. The Australian common-sense test says that you do everything you can to help a fellow Australian—or any human being for that matter—who is suffering pain. Knowing that there is a drug there that can alleviate pain and potentially save someone’s life and it is only a question of money makes the decision very difficult to make. However, I respect the fact that cabinets do have to make those sorts of decisions. They are cabinet decisions. One reason why these decisions are made ultimately by the cabinet is that they do deal with often life-and-death situations or, certainly, as a minimum the massive alleviation of pain. However, overall you must say that over the time of Liberal, National and Labor governments the right decisions have been made.

Today appears to be the 60th birthday of the Pharmaceutical Benefits Scheme. I am sure historians can find some way of arguing it over a long period of time. Historians are like economists: they have lots of different views—the difference is economists often project what is going to happen and historians reflect on what is happening. But one thing is for sure, they never agree with each other—thankfully. Having said that, the PBS is a very good scheme. It is one that we can be proud of as a nation. The fact that there are continuing changes to the PBS only enhances it generally, in my view. In relation to this bill, which deals with a number of minor changes, there is no opposition from the coalition. From 1 July 2008 you will pay up to $31.30 for most PBS medicines or $5 if you have a concession card and the Australian government will pay the remaining costs. In some cases that is hundreds of thousands of dollars. I know one of the great challenges that the previous government had was trying to have cost transparency on the bottle or the drug packet. I do not think we quite got there in toto, but I hope that the new government continues with that initiative.

One of the initiatives the previous coalition government introduced that I am very proud of was the Pharmaceutical Benefits Scheme safety net, which allows families to pool the out-of-pocket costs for medicines. Once an individual or family reaches a safety net threshold, they can apply for a PBS safety net card and this means all future PBS medicines will be less expensive or free for the rest of the calendar year. In 2008 the general patient contribution is $31.30 and the general patient safety net threshold is $1,141.80, or about 37 standard prescription items. I recognise that this bill does not in any way undermine the PBS.

I will make one interesting observation. One of the moments when there was a significant expansion of the PBS was after Cyclone Tracy in Darwin. I was only nine years of age at the time that happened. I am almost embarrassed to say that to you, Mr Deputy Speaker Adams, but I was a young’un in 1974. However, I do remember Cyclone Tracy—it was a catastrophe of sorts—on Christmas Day in 1974. One of the things I never realised was that, after Cyclone Tracy hit Darwin, a vast amount of pharmaceuticals had to get up to Darwin to address the potential outbreak of disease. The PBS kicked in in a very substantial way at that moment and it illustrated one of the significant benefits of having a very successful Pharmaceutical Benefits Scheme that is able to continue the involvement of international pharmaceutical companies directly in Australia.

The fact that a number of the international pharmaceutical companies have a very significant Australian presence is important for our country because it ensures that they are party to the ongoing challenges of increasing demand for pharmaceuticals in Australia and also that they have a ready domestic supply of pharmaceuticals rather than requiring massive and rapid importation of pharmaceuticals during national emergencies. Also, there is a very significant research element associated with international pharmaceutical organisations in Australia.

Australia might not be the most profitable pharmaceutical market in an international comparison, but it is a constant and growing market place for worldwide pharmaceutical companies. It might not have the growth of India or China, but it does have a constant stream of income and the stability to ensure that those companies can be active players. That is one of the reasons we are concerned about the other legislation which just came through this place about charging pharmaceutical companies for regulation of the industry. We do not want to do anything to cause international pharmaceutical companies to exit the Australian marketplace, but at the same time we must recognise that the size and stability of the pharmaceutical market in Australia and the stability of the PBS are all reasons the scheme works well and international companies continue to participate in the Australian pharmaceutical market. Ultimately, that will mean better quality, more affordable pharmaceuticals for the Australian community and that is what we on both sides of the House agree on.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I agreed with the member for North Sydney when he said that parliamentarians in this place have to be prepared to provide support for those need it. I recognise the bipartisanship in relation to this issue. This sort of legislation indicates that there are people of goodwill and compassion on both sides of the House, people who genuinely care for those in need. It is quite extraordinary, when you look at the history of the Medicare system and the PBS, what rancour, contention and division there was in our community over such a long period of time. There was constitutional not just legal wrangling about the PBS. I pay tribute to the Curtin and Chifley Labor governments, the architects and originators of this particular scheme. I also recognise and acknowledge the Menzies government’s contribution. This was a bipartisan approach. It is quite amazing that there were self-interested groups who opposed this.

I have to disagree with the member for North Sydney saying that this scheme is one of the best systems in the world. I think it is the best system. I have not heard of a better system. I think it is a fantastic system. There would not be a person in this House who has not benefited or had friends or relatives benefit from this scheme.

I support the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2008. It has a number of purposes. It expands the criteria for deciding which brands of pharmaceuticals are comarketed and further, it affords the minister power to determine which comarketed brands cease to be comarketed. When the minister explained to me what this was all about, I thought it was quite amazing. For example, if two drug companies currently manufacture, say, a 250-milligram drug, one called ‘Brand A’ and the other called ‘Brand B’, and if they want to comarket another drug, say ‘Brand X’ in 500 milligrams, they cannot comarket. It is quite extraordinary that this has happened. It is certainly not desirable. We want to make sure that the PBS is efficient and that it works in a streamlined way. Anything that reduces costs or can deliver drugs more affordably to the Australian community would be better.

The amendments in schedule 1 eliminate the necessity that there be no pharmaceutical items containing the same drug. ‘Pharmaceutical items’ was the offensive term. It means that drug companies could comarket at both dosages. That is a practical measure. It also allows the minister to decide when comarketed brands no longer meet the criteria. This may seem esoteric, but it is a good thing. The idea that somehow you can do this by legislative instrument power of the minister means there is no need to amend government regulations and overall the administration of the PBS is more efficient. That is good for all Australians.

Secondly, the supply of pharmaceutical benefits to government officers working outside Australia is very important. Australians do not serve overseas only with the military; they serve overseas in embassies and for aid organisations. We live in a world where other countries are a lot closer than in the past. My grandparents would have thought getting on a plane and going overseas was like going to the moon. It is the case that Australians travel regularly. There would not be too many Australians who do not have passports and travel overseas. Many of them live there. This amendment provides for eligible Australian government officers who are working overseas, public servants serving our country in all manner of places and in all manner of roles, to have access to affordable medicine, just as they would were they living in Australia. Any parent working overseas who has sick children would know that that is a challenge. It would be a challenge for any of us. We suffered that problem when we were overseas—finding a doctor and where the hospital is and getting affordable medicine. It is not just the public servants; it is their spouses and their dependent children, all of whom need access to affordable medicine. This bill solves that problem.

I am aware that Commonwealth government departments have been lobbying for this change for quite some time. I am also fascinated by the fact that it is not just Commonwealth officers who will benefit; state and territory officers will also benefit from these entitlements. Do not ever let states and territories say that we do not do things for them.

Thirdly, there are the amendments relating to couples being apart. Schedule 3 provides that, for the purpose of the PBS safety net, legally married and de facto couples living apart permanently due to illness or infirmity are taken not to be living apart. That is a great reform. It is really quite sad that a lot of elderly people are forced by illness or infirmity to live apart in circumstances where they do not want that to happen. One might be at home while the other needs full-time care in a nursing home or even in a hostel. They are forced to live apart. This bill overcomes the PBS safety net issues so that they are treated jointly.

It was wrong that these unfortunate couples living separately through no fault of their own—often elderly, frail and pensioners—were not treated the same. Certainly they did not believe they were separated but, for the purpose of the PBS safety net, they were. That is simply wrong, and this overcomes that problem. I am sure that the people in my constituency of Blair will appreciate this.

Prior to coming to this House, six months ago I served on the board of Queensland Baptist Care. We had three aged-care facilities in my electorate and I visited all of them, and I have visited a number of other ones since I have been elected. You see couples living separately and apart. The aged-care sector tries to construct facilities so that people can live together, but it is simply not possible by reason of the need for full-time care. So this brings comfort and help, and anything to aid those people who are suffering from this difficulty is to be commended. The cost is only $1.l million annually, and I think it is a small price to pay for treating our fellow Australians with compassion, care and kindness in the circumstances.

The fourth amendment is really very basic. It is simply changing definitions concerning combination items for a drug and pharmaceutical items as a drug. It is quite esoteric—I went through it and had a look. The bill provides that henceforth by legislative instrument these things can be changed and certain pharmaceutical benefits can be specified. These pharmaceutical benefits thereafter can be prescribed by dental practitioners and optometrists. The schedule means that wording concerning gazettal of determinations is otiose and therefore can be removed.

To finalise, and I want to speak only briefly about this, this bill will help public servants—state, territory and Commonwealth—to gain access to pharmaceutical benefits, just as their fellow Australians do living at home, when they are serving our country overseas. It will not just help them; it will help their spouses and partners and their children, which is a great thing. It will also mean that we treat our elderly and frail and those who unfortunately have to live apart with dignity and respect. I thank the opposition for their agreement to this bill. I think that it is important we adopt a bipartisan approach not just to Medicare but also to the PBS. I thank the opposition for their willingness to support this bill. I know that my constituents, particularly the elderly, the frail and those who are suffering illness and infirmity, will appreciate very much this initiative, and I thank the minister for bringing this to the House.

Justine Elliot (Richmond, Australian Labor Party, Minister for Ageing) Share this | Link to this | Hansard source

The Pharmaceutical Benefits Scheme is indeed regarded as one of the best systems of its kind in the world. As we know, it provides affordable access to high-quality medicines for all Australians by subsidising the cost of PBS medicines and delivering them through local pharmacies and hospitals in the community. The PBS safety net ensures that families and individuals who require large amounts of medicines are protected from high cumulative cost. The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2008 contains amendments to the National Health Act 1953 which, although unrelated, will help to ensure that the PBS remains current and operates effectively for all Australians whether as PBS users, suppliers or the medicines industry.

One of the amendments improves access to the PBS safety net. It will mean that couples living apart due to illness or infirmity will be able to use the safety net jointly. These couples will be able to combine PBS co-payment contributions towards the same safety net threshold. Both persons will be able to be included on the same safety net card and have access to safety net benefits once the threshold is reached. In effect, the amount of PBS payments required for both members of the couple to reach the safety net will be the equivalent of one safety net threshold, not two. This has the potential to reduce the out-of-pocket cost for PBS medicines for such couples by an amount equal to the relevant safety net threshold amount. PBS medicines required by either person can then be obtained at the reduced safety net rate for the remainder of the calendar year.

This change is essentially a matter of fairness. There is no good reason why people who as a result of illness or infirmity are forced to live apart should not have the same PBS entitlements as other couples. This amendment strengthens the ability of the PBS safety net to deliver real benefits and savings to the people who need them and it recognises that, when couples need to live apart for reasons of ill health, frailty or dependent care, they do not cease to be a family. It provides continuity for joint access to safety net entitlements for these couples despite their living circumstances having changed. It will improve the affordability of PBS medicines for these people at a time in their lives when they may be most in need of the benefits of the PBS.

The bill also amends the act to extend access to the PBS for government officers working outside Australia. Current PBS eligibility, supply and export restrictions prevent pharmaceutical benefits being provided to government officers when working overseas despite eligibility to the PBS in Australia. However, accessing medicines outside Australia can be difficult and uncertain. The changes will allow pharmacists to dispense PBS prescriptions for medicines required by these officers and by accompanying spouses and dependent children and for those medicines to be sent outside Australia in quantities required for their personal use. This will provide access for these Australians to quality affordable medicines and PBS safety net entitlements.

The amendment to the criteria for determining comarketed brands will ensure that the legislation operates as was originally intended. The amendment will allow comarketed brands to remain comarketed in certain circumstances and continue to have the comarketing pricing benefits even if they are brands of more than one pharmaceutical item. In addition, the amendments provide that the minister may, by legislative instrument, determine that comarketed brands cease to be comarketed. That ministerial determination will have precedence over the regulations prescribing comarketed brands. This is an important amendment as it facilitates timely and efficient administration of the PBS comarketing arrangements.

This bill also contains minor and technical amendments which change the way that two definitions are referred to in the act and removes the requirement for the gazettal of certain ministerial determinations. The relevant determinations will be legislative instruments for the purpose of the Legislative Instruments Act 2003. I thank all the members who made a contribution to the debate on this bill. The changes in the bill strengthen the PBS and improve access to PBS entitlements. The government will continue to monitor the PBS to ensure that it is operating as intended and to ensure that access to necessary medicines is available when needed by those Australians eligible to receive them.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.